Former ORNGE aviation boss Rick Potter negotiated $10 million off the price of Italian helicopters but he was overruled by Dr. Chris Mazza, who wanted to turn down the discount, an all-party legislative committee has heard.

By:Kevin Donovan and Tanya TalagaQueen’s Park Bureau, Published on Wed May 09 2012

ORNGE paid about $7 million more for 12 helicopters than it had to, a Queen’s Park committee was told Wednesday.

“Are you freaking crazy?” Potter recalled telling Mazza when he confronted the boss of the air ambulance service. The savings related to extra money he said AgustaWestland was attempting to charge for obtaining government certification that the helicopters could carry carry a greater weight than usual, a requirement because the choppers were being used for air ambulance work.

In his testimony, Potter described the savings he negotiated as $10 million. He said ORNGE ended up paying Agusta $7.2 million in additional charges.

Potter, who now consults at ORNGE for $20,000 a month, told the hearing looking into the air ambulance scandal that he spoke to ORNGE’s corporate lawyer Cynthia Heinz, former executive vice-president Maria Renzella, and others and said “this is nuts.”

The startling testimony was heard at the public-accounts committee hearing probing questionable contract payments, high salaries and the creation of spinoff for-profit companies at ORNGE, an agency that receives $150 million a year in public money.

Progressive Conservative MPP Frank Klees asked Potter if he contacted the board of directors when he found out about the $7.2 million.

“I did not contact the board of directors; I thought it’d be inappropriate as an employee. I contacted seven people including legal counsel and confirmed the legal counsel on both sides was in agreement with this. My assumption was I was obviously missing something,” he said.

After the hearing, Klees said the $7.2 million subsequently became a $6.7 million marketing agreement paid back to an ORNGE for-profit firm.

“So, in the end, you have Agusta paying back to an ORNGE company some $6.7 million. For what, we asked. Mr. Potter made it clear in his testimony he thought it was inappropriate,” said Klees. “You know, I have referred to this as a kickback and I am just fine with reasserting that today.”

Now, the committee must “follow the money,” said Klees.

The Ontario Provincial Police is now investigating the $6.7 million contract. Klees has also contacted the U.S. Attorney General’s office and asked it to investigate. Since the deal was negotiated through the Philadelphia headquarters of Agusta, there are “international implications” here, he said.

“You have here, the beginnings of the unraveling of a story that not only involves putting peoples’ lives into danger and compromising patient care, but, I think at the base of this is greed,” Klees said.

The Speaker of the legislature has issued a rare warrant forcing Mazza to testify on May 16. However, the Star has learned two psychiatrists have deemed him unfit to testify.

Klees said the committee will wait for Mazza and has asked to sit through the summer, if necessary.

Potter testified he first met Mazza in 2005 when he was asked by Kelly Mitchell, of Pathway Group, to become a board member. Potter also told the hearing he is a lifelong member of the Conservative party and ran as a federal candidate in Thunder Bay. Mitchell is also a prominent Conservative.

Mazza was an impressive personality, a visionary and “brilliant individual,” said Potter, but his management style “left something to be desired. It was somewhat confrontational.”

It was accurate to describe Mazza’s management style as tyrannical, he added. “I think I threatened to quit twice,” he said.

Last February, the Star previously revealed Potter pretended to have a Scottish MBA to help woo investors into kicking in $275 million for new aircraft.

However, Potter emphatically told the committee it was Mazza who urged him to say he had the degree. “At no point in time did I ever tell anybody at ORNGE that I had an MBA. As a matter of fact, I told Chris Mazza twice I didn’t,” he said. “He said it would look a lot better if I did.”

Potter said he didn’t know Mazza was earning $1.4 million a year until he read about it in the press. Potter quit the board five years ago when he joined the company as an employee.

Like Mazza, Potter’s salary disappeared off the public disclosure sunshine list. Potter was last listed in 2008 as earning $180,000 a year at ORNGE. But in 2009 it evaporated, noted NDP committee member MPP France Gélinas.

“That was a corporate decision. I volunteered every year to have the salary published,” he said.

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